Given that data plays a pivotal role in informed decision-making for businesses, there has been a dramatic increase in data analytics investments over the past years.
However, many organizations overlook the critical step of data evaluation, jeopardizing the integrity of their data science endeavors. According to IBM, the impact of poor data quality is staggering, with a hefty $3.1 trillion annually stripped from the U.S. economy.
As businesses enter the big data era, they need to pay close attention to the important practice of data evaluation to step ahead of the game.
This comprehensive guide will help walk you through the basics of data evaluation, from its definition and significance to step-by-step instructions to evaluate data successfully.
So, without further ado, let’s dive right into it!
What Is Data Evaluation?
Data evaluation is the process of checking data, its format, and sources to ensure its accuracy and completeness, fostering the achievement of organizational objectives.
This process is widely known in scientific and healthcare fields, where ensuring the dependability of different data sources is integral to the business nature. Companies in these sectors are often required to scrutinize the origin, collector, purpose, and methodology of their data.
- Who collected the data?
The data reliability is influenced by the ones collecting it. Data from reputable sources like professional organizations and government agencies is generally more trustworthy than that from less credible sources. So, make sure to review the authority of the data collector on the subject.
- What is the data provider’s purpose?
It’s also necessary to evaluate the objectivity and intent of the data provider, especially when dealing with information from commercial businesses or politics. Thus, identifying potential biases is vital, as research integrity may be threatened if incentives for bias exist.
- When was the data gathered?
Obtaining the most accurate and relevant information is important, especially when seeking data in industries going after the latest trends.
- How was the data set?
You should examine the methods used to collect the data and then compare these with similar projects to identify any inconsistencies that may impact the reliability of the data. Different data analysis processes may necessitate distinct approaches to data assessment. Data evaluation in accounting, for example, adheres to different standards than in AI-driven scenarios. The unique types of data in each field require a tailored evaluation process.
Why Is Data Evaluation Important?
Businesses have increasingly relied on AI to make better decisions, from targeting the right markets to adapting to demand shifts and optimizing supply chains. However, AI’s trustworthiness is directly linked to the quality of the data it processes.
Adopting inaccurate, incomplete, and irrelevant data could lead to poor-quality insights, potentially causing more significant financial losses than ever. Therefore, companies must prioritize data evaluation as one key step before jumping to seemingly smart data-driven decision-making.
Data Evaluation Methods
Several methods are available for evaluating data due to the diverse forms of information and analytical processes. The following are two common methods: quantitative and qualitative data evaluation.
Quantitative Data Evaluation
Quantitative data evaluation deals with “hard data”, meaning precise figures like percentages and measurements. This approach suits processes with clear-cut dynamics, for instance, computer vision software identifying objects with a binary “yes-or-no” approach. Therefore, the data to train these systems must be precise.
Collecting quantitative data involves conducting scientific experiments, deploying multiple-choice surveys, and making mechanical measurements. The validation of this data follows a similar approach. Since the information comprises hard facts and figures, tools for data evaluation must be compared against established and specific standards.
Qualitative Data Evaluation
In contrast, qualitative data evaluation concentrates on non-statistical, less rigid, and more nuanced information beyond complex numerical values. While quantitative data analysis addresses “what” and “when”, qualitative analysis is more adept at answering questions related to “why” and “how.”
This analysis process typically explores open-ended, subjective data, such as social media interactions, interviews among focus groups, and expert opinions. While challenging to incorporate into mechanical or mathematical processes, qualitative data provides valuable context for decision-making and comprehending abstract concepts.
Evaluating qualitative data is less formulaic yet essential, requiring a human touch. This assessment may include posing questions about potential biases, study limitations, or the potential for outdated information. Asking these questions proves crucial when evaluating clinical report data or other processes demanding transparency about information biases.
How to Analyze and Evaluate Data
Determining the best approach for analyzing and evaluating data relies on the specific scenario, given the differences in techniques for various use cases.
However, the overarching process remains consistent across diverse applications:
1. Collect Data
Collecting data lays the foundation for subsequent evaluation. Businesses should decide their data utilization goals, guiding the collection of relevant information. A marketing team assessing an advertisement campaign requires different data than a manufacturer seeking workflow inefficiencies.
Each case employs unique technologies and strategies for data collection. However, keep in mind that while collecting specific data for a particular use case is prudent, an excessively narrow approach may leave out vital context, altering the real-world significance.
2. Select the Optimal Evaluation Method
Next, choose the most suitable data evaluation technique – quantitative, qualitative, or both. While quantitative analysis offers specificity and objective outcomes, particular cases may need qualitative analysis.
Consider measuring the onboarding maturity of organizations. In the human resource management field, although higher maturity correlates with improved employee retention, there is no universally accepted scientific measurement for this abstract concept. As a result, businesses seeking to measure it have to resort to data sources like interviews and expert insights, which necessitates qualitative analysis.
3. Organize and Clean the Data
Now is the time for data organization and cleansing, which addresses incomplete records, spelling errors, duplicates, etc. These mistakes are tiny but can cause serious consequences.
Data cleansing ensures records’ accuracy to prevent inaccurate results. Many data evaluation software solutions incorporate cleaning features to automate this process, minimizing the risk of human error.
Simultaneously, companies are suggested to organize data into well-defined categories, which significantly streamlines the identification of inaccuracies and accelerates analysis.
4. Identify Gaps and other Issues
Businesses must scrutinize their refined and structured records, posing inquiries to gauge their reliability and relevance to predefined objectives.
Detecting data gaps is among the key issues to address here. These entail any absent information that is crucial for obtaining the most accurate answers. Sometimes, gaps only surface during the data analysis phase, requiring a revisit after receiving results from analytics programs.
Organizations can employ various data assessment tools, including automated programs, to compare quantitative data against established standards. Consulting experts to address bias or research limitations is also a valuable practice.
Also, bear in mind that while anticipating incomplete records or unanswered questions is normal, it’s statistically significant to reconsider the evaluation planning and data collection processes if any pervasive issues or substantial concerns across the data set arise.
5. Submit Data for Analysis and Interpretation
Once you’re confident in the validity of data evaluation and establish record accuracy, submit the data for analysis. A robust evaluation plan should streamline the data analysis, extracting actionable conclusions from the verified and organized information.
While manual data analysis is an option, leveraging AI software is often more efficient, as AI excels in pattern recognition. Monitoring project results based on this data is essential, and if any shortcomings emerge, teams should review their data collection and evaluation methods to ensure the use of accurate, relevant information.
It’s worth noting that businesses should pay considerable attention to data management while carrying out evaluations, given the huge amounts of information involved. This is also because poor management practices may lead to data breaches or inaccurate findings.
Organizations can consider centralizing all information in scalable cloud storage solutions to ensure comprehensive data accessibility. Similarly, employing software that consolidates information can help streamline processes. They should also regularly review information and delete irrelevant data to manage large data volumes more effectively.
Given the increasing threat of data breaches, robust data security measures should also be in place. In 2023, global data breaches cost $4.45 million, marking a 15% increase over three years. Therefore, organizations must limit access permissions, employ automated monitoring technologies, enforce strong password management, and implement up-to-date security software to safeguard against potential threats.
Data evaluation plays a huge part in steering businesses toward accurate and valuable information. This comprehensive guide unfolds the significance of data evaluation, showing you how important it is to look at where your data comes from, how it’s gathered, and if any biases might affect its accuracy.
Hopefully, our sharing about quantitative and qualitative data evaluation methods and five key steps to evaluate data is of great help to your business’ data-driven decision-making journey.
If you want to make sure your data is in good shape, Neurond is your great assistant! We offer numerous data outsourcing services, from data collection to data cleansing and strategy consultation. Ready to take the next step? Contact us now!